Travel loan is a kind of consumer credit that can be quickly obtained for one specific goal – paying for your vacation. In its essence, it is one of the types of express lending. In this case, you can expect:
- a quick approval;
- providing a minimum of documents;
- a short repayment period from three to 12 months.
Therefore, the interest rate for such loans, as a rule, is somewhat higher than for non-targeted consumer loans (for non-urgent needs).
The credit amount is given only for the cost of the voucher and is usually transferred to the account of a travel agency the borrower has concluded a contract with for provision of the corresponding services. Cash credits in such case are less likely. The size of the credit is limited to about $10 000.
How to Obtain A Travel Loan
Such loans are usually drawn up using the same schemes as for express credits. They can be obtained both in the bank’s or travel agency’s offices (many of them have partnership programs with banks). The decision to issue a loan is accepted on the same day, at the latest – within three days.
If for some reason you do not use your ordered tour, two options are possible, depending on the terms of the loan agreement:
- Either the bank cancels the borrower’s obligations and also returns the money spent on commissions;
- or cancels the obligations and keeps commission money as a reward for its services.
But as a rule, these fees are small, so the losses will be minimal.
In some banks, the borrower is required to make an initial contribution from own funds – from 10 to 30%, while in others it will be possible to get an amount equal to the full cost of the tour. In the latter case, the borrower is likely to pay a commission for issuing a loan – from 1 to 2% of its amount. However, the bank can add the cost of the fee to monthly repayments scheme.
In general, when you apply for a travel credit, you deal with the traditional requirements of the banks. The terms of the loan and repayment are stipulated in the loan agreement.
Peculiarities of Travel Loans
The only specific peculiarity of these loans is a small grace period. The first payment may be postponed in order not to make it immediately in the first month, but it should be made in two or three months. However, this benefit is not always available. Moreover, not so many banks offer targeted credits for recreation. Due to their peculiarities, though, they can be convenient for you (since they are issued promptly) and are profitable, since you can get some discount from a travel agency for buying on credit.
If you are willing to save time and reduce the chances of failure to a minimum, it makes sense to contact the credit broker. In this case, the chances of approving your application increase significantly.